Senate Banking Committee Chairman Phil Gramm on Thursday vowed that the Senate would take the lead on financial reform legislation.

The Texas Republican said he was told by House Commerce Committee Chairman Thomas J. Bliley Jr. that the House panel will not vote on the bill until Senate Republicans and Democrats settle their differences.

"Bliley is not going to move the House bill in Commerce until we have acted," Sen. Gramm said. "They have taken the position they don't want to go through the whole process if the Senate is not going to pass it."

But supporters in the banking, insurance, and securities industries are eager to keep the House bill moving after last week's 51-to-8 approval by the House Banking Committee.

"We are extremely encouraged with the momentum that financial modernization enjoys at this time and will do everything we can to keep the pressure up to keep things moving forward as quickly as possible," said Financial Services Council president Samuel J. Baptista.

Echoing industry concerns, House Banking Chairman Jim Leach and the panel's ranking Democrat, John J. LaFalce, sent a letter last week to House Republican leaders, urging them to impose a short time limit on the Commerce panel's consideration of the bill. No decision has been made, but sources expect it to be at least one or two months.

"Both bodies should act with deliberate speed," Rep. LaFalce said Thursday. "We shouldn't wait for each other."

Lobbyists are encouraged that Majority Leader Trent Lott is pushing for a Senate vote by mid-May. The House Commerce Committee could hold hearings in the interim and be ready to vote in May, too.

But that optimistic scenario hinges on Sen. Gramm and Democrats coming to a quick compromise on community reinvestment requirements and other controversial provisions.

"We are on the verge of moving ahead," Sen. Gramm said. But Democratic sources said not much progress has been made and that compromise is nowhere in sight.

Speaking at a conference of the National Bankers Association and the American League of Financial Institutions, Sen. Gramm insisted he is not trying to repeal the Community Reinvestment Act. He said he wants to exempt small banks from the law and protect merging institutions from unsubstantiated protests with their pressure to pay off community opponents.

He also stood firm on the Senate Banking Committee's tighter limits on powers for bank operating subsidiaries.

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